The Parliament passed a constitutional amendment with its third and final reading on December 15, making referendum binding in case the government decides to increase taxes (except of excise and local taxes).

But unlike initial draft, the final version contains a reservation according to which a separate, organic law should define those cases in which the government will still be able to increase taxes without calling a referendum.

MP Petre Tsiskarishvili, leader of the parliamentary majority, said before the vote on December 15 that this provision was needed in order not to create “a perception that in the case of crisis government will be restricted and will have no flexibility to react on concrete economic situations.”

Gia Khuroshvili, the government’s parliamentary secretary, told lawmakers on December 15, that the separate organic law would spell out those specific circumstances in which the government would be able to bypass referendum requirement in case of intention to increase tax or introduce a new tax.

The provision will go into force together with the recently passed major constitutional amendments, after the October, 2013 presidential elections.